Sentences with phrase «+ nominal dividend»
The scale factors are -LSB-(1 + nominal dividend growth rate) / (1 + inflation)-RSB- ^ N.
http://www.early-retirement-planning-insights.com/ Not exact matches
The formula for the real income of an investment at year N is: Inflation adjusted dividend income = (initial dividend amount) * -LCB-[1 + (nominal dividend growth rate)-RSB- ^ N -RCB- / -LCB-[1 + (inflation rate)-RSB- ^ N -RCB- Typically, you would use a nominal dividend growth rate of 5.5 % per year in the absence of other information and 3 % per year inflation.
The Investment Return equals (0.6 * the initial dividend yield of Stock A + 0.4 * [the 2 % real TIPS interest rate + the 3.0 % inflation rate]-RRB- + (0.6 * the nominal growth rate of the Stock A dividends + 0.4 * the growth rate of TIPS (which equals the 3 % inflation rate)-- the 3.0 % inflation rate.
The Investment Return = Initial Dividend Yield + Dividend Growth Rate (annualized, nominal)-- Inflation = 4 % +5 % -3 % = 6 %.
Since the nominal dividend growth rate is 5.5 % and the long term inflation rate is around 3.5 %, (1 + real rate of growth) = (1.055) / (1.035) = 1.0193 or the real rate of growth = 1.93 %.